Wrong by a factor of eight: the FT on green energy costs report

  • 16 Dec 2011, 14:33
  • Robin Webster

Yesterday we wrote about the media coverage of the Climate Change Committee's analysis of energy bills, in particular highlighting some pretty epic cherrypicking by the Daily Mail.

We commented at the time that, apart from the Mail article, the reporting had been pretty accurate. However, we actually missed what seems to be the most inaccurate presentation of the Committee's findings, because we didn't look properly at the FT's article (£ - or here for free, rewritten a little). (Thanks @neilstockley for bringing it to our attention.)

The FT's article is headlined "Household energy bills to rise by £100 a year", and the first sentence reads:

Consumers can expect their household energy bills to increase by £100 a year over the current decade to support carbon-reduction commitments, according to a government-sponsored report.

This just seems to be plain wrong. The CCC's report says that average household energy bills will rise from around £1060 in 2010 to £1250 in 2020. This is a rise of £190 in total - nowhere near "£100 a year".

Over the decade, the CCC estimate that the impact of 'green measures' on bills will increase by £110, compared to now.

The FT's estimate of costs to 'support carbon-reduction commitments' over the same period amounts to £900 by 2020  - so in reporting the CCC's findings, they are out by a factor of about eight.

Normally with these kind of figures it's obvious how they have been mangled to produce inaccuracies. But on this one, we are genuinely stumped.

The FT should have got this right - particularly as later on on the article, they quote Lord Turner, who contradicts their headline in very simple terms:

"Over the next decade, we anticipate a rise of around £100 in the average bill as a result of investment in low-carbon power capacity, which will benefit the UK in the long run. And if we introduce new policies to stimulate energy efficiency improvement then bills in 2020 could broadly be contained at current levels."

If anyone has any ideas for how this happened, we'd welcome them. It could be a case of having confused total rise with per-year rise - if so, that would be a pretty fundamental error.

Less of an issue, but also worth noting, is some 'percentage creep'. The FT write:

Charges to support the reduction in carbon emissions are expected to rise from around 8 per cent of energy bills to nearly 20 per cent over the current decade.

By 2020 the CCC estimate that green energy measures will account for £190 of a £1250 energy bill - which is 15.2%, not "nearly 20%" as the FT report.

The rest of the article appears to be accurate. It's finished off by a quote from Benny Peiser, Director of the Global Warming Policy Foundation:

"Benny Peiser, director of the lobby group argued that the government faced "a political backlash" if it accepted higher subsidies for high-cost alternative forms of energy generation."

Given the GWPF's previous contributions to the accuracy of this debate, perhaps it's fitting that they are quoted in an article that appears to get the numbers so perplexingly wrong.


UPDATE 19/12/11 We have now had a response from the FT, who tell us that the headline and first paragraph of the FT piece were intended to mean that the annual costs of green energy to consumers will rise by £100 in total ("£100 a year") rather than £100 every year. This does make sense - and answers our question about how they got there. However we would suggest the headline "Household energy bills to rise by £100 a year" is much more likely to be interpreted as an annual, rather than total, rise of £100. A headline which makes the real facts clear might have been a better idea.

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